Gold slipped back below $1185 an ounce in London trade on Tuesday morning, holding above yesterday's 1-week closing low but remaining "directionless" according to one Chinese dealer.

"Investors are unclear about the immediate trend," agrees Pradeep Unni at Richcomm Global Services in Dubai, telling Reuters that "physical gold buying is only expected to emerge by the end of this month."

But "Current levels [of physical gold buying] compare well with previous highs reached earlier this year and late-2009," says Walter de Wet at Standard Bank.

"We expect support from the physical market to increase towards Q4:10. Buying of gold for jewelry demand, especially in India, may increase in August/September."

On the broader financial markets today, European equities rose to new 10-week highs as Deutsche Bank and UBS both reported stronger-than-expected revenues, and Britain's BP oil giant slated $30 billion of assets for sale to help fund the Gulf of Mexico clean-up.

All major commodities rose in price, with US crude oil contracts gaining above $79 per barrel and Silver Prices rising to $18.30 an ounce.

The 16-nation Eurozone meantime reported the first growth in the currency union's money supply since October, with June's 0.2% increase in the broad M3 measure of money defying analysts' forecasts of another fall.

The Euro rose above $1.30 for the second time in a week, nudging the Gold Price in Euros back down to last Monday's 3-month low beneath €29,200 per kilo.

All major currencies bar the Japanese Yen rose vs. the Dollar, in fact, with the British Pound hitting a new 6-month high that squashed gold to fresh 13-week lows near £762 an ounce.

Spot Gold prices for UK investors have now slid 12.5% from last month's all-time peak.

"Gold cannot really be in a bubble when a BCA report is featured in Barron's telling people to bail – bubbles usually involve universal love," says David Rosenberg, chief economist and strategist at Canadian asset managers Gluskin Sheff.

"Besides gold, the big surprise for the year is that we are seven months into it and the bond market has smoked equities in terms of generating a total return for investors – and with a lot less volatility.

Long-dated zero-coupon bonds have gained 21% so far in 2010, Rosenberg notes. "And yet the typical institutional investor right now is sitting 68% in equities!"

G7 government bonds slipped again on Tuesday, pushing the yield offered by 10-year US Treasuries further above 3.0%.

Two-year German Schatz bonds offered 0.87% per year by lunchtime in Frankfurt.

Consumer prices rose 0.9% last month from June 2009, according to Germany's federal statistics office.

"Gold investors enjoy no income on coins or bars, and have to pay the costs of storage and protection," says John Redwood, UK Conservative MP and chairman of the Evercore Pan Asset investment advisory, quoted by InvestmentWeek.

"[But] it appears rising Asia likes the shine of special metal, as well as some rich Westerners, and this is adding to the speculative attraction."

"The key factors that have been driving Gold Investment demand are likely to persist," says Evy Hambro, manager of the $3.9bn BlackRock Gold & General fund.

"Positive long-term factors, including falling mine supply and the potential for a reduction in net central-bank sales, will all be supportive of prices. Indeed, central banks may even become net buyers of gold."

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